Indonesia: Proving bad faith of a distributor in a trade mark cancellation

Managing IP is part of Legal Benchmarking Limited, 1-2 Paris Gardens, London, SE1 8ND

Copyright © Legal Benchmarking Limited and its affiliated companies 2026

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Cookies Settings

Indonesia: Proving bad faith of a distributor in a trade mark cancellation

Many foreign trade mark owners rely heavily on their local distributors to get their products distributed in the Indonesian market and sometimes place too much trust in them considering the local distributors' local knowledge of the market. Consequently, some unfortunate cases can occur where the distributors take advantages of the rightful trade mark owner's lack of protection and seek the registration of the trade mark in their own names, without obtaining the trade mark owner's consent. This is done in the hope that once the distributorship ends, the existing registrations may serve as their leverage in seeking opportunities to continue selling.

With the first-to-file trade mark registration system, challenging a trade mark registration by a distributor at the Commercial Court could be difficult. The judges' standard practice in assessing bad faith elements would be to rely on earlier trade mark registration details in other countries, possible public confusion and the degree of similarity. Where the trade mark owner is claiming well-known status, relevant evidence of extensive use of trademarks is also required. Subsequently, relevant circumstances relating to the filing of a trade mark (such as prior knowledge or distributorship arrangements) may become secondary from the panel of judges' perspectives.

However, things may change for the better for foreign trade mark owners. In a recent trade mark cancellation case involving the holder of a well-known mark and its former distributor in Indonesia, the panel of judges at the Commercial Court affirmed that the meaning of bad faith filing under the Trade Mark Law should also encompass the filing of a trade mark by a local distributor without consent from the rightful trade mark owner in a foreign country.

In its consideration, the panel of judges assessed the distributors' bad faith intention, and found that relevant provisions of the Paris Convention affirming that trade mark owners are entitled to cancel the unauthorised registration of their local agents/representatives should apply. The panel of judges also reviewed the distributorship arrangement (including the letter of appointment, purchase receipts and relevant correspondence) along with the evidence of registrations and use of the well-known trade mark, before finding in favour of the trade mark owner.

Although the recent Commercial Court decision may be seen as a positive development, as best practice it is always advisable for foreign trade mark owners to secure trade mark registrations prior to entering into the Indonesian market. Moreover, it is also advisable to have relevant provisions in the distributorship agreement or licence agreement with the local parties prohibiting them to file any similar or identical trade mark registrations.

Lukiantono_Daru
Silalahi

Daru Lukiantono

Raja Mada Silalahi


Hadiputranto, Hadinoto & PartnersThe Indonesia Stock Exchange Building, Tower II, 21st FloorSudirman Central Business DistrictJl. Jendral Sudirman Kav 52-53Jakarta 12190, IndonesiaTel: +62 21 2960 8888Fax: +62 21 2960 8999www.hhp.co.id

more from across site and SHARED ros bottom lb

More from across our site

Boehringer Ingelheim has instructed a team from Kirkland, while Teva is being represented by Pinsent Masons
The Delhi High Court’s latest directions offer an opportunity to move beyond remedies against bad-faith registrations and address how suspicious applications are identified in the first place, says Fatima Baig at Lexlinc
Camilla Hamrin describes how the acquisition by Acapo Onsagers will impact Bergenstråhle’s trademark practice – and reflects on changes she has seen over 30 years in IP
On a recent trip to the French capital, we learned that the UPC is squeezing domestic litigation while firms are chasing senior talent, experimenting with AI and considering new ways of organising their practices
Daniel Law says a string of lateral hires and broader expansion plans will strengthen its position to capitalise on Brazil’s burgeoning IP and patent litigation market
Jason Raeburn’s arrival will expand the firm’s London footprint in AI, copyright and tech disputes
The firm is shaping its AI strategy around partnerships with Harvey and Legora alongside internally developed tools from its legal technology company, Eltemate
A dispute Down Under shows why trademark lawyers cannot afford to wait on the sidelines when a rival brand gathers momentum
The Third Circuit’s decision in Thomson Reuters v ROSS marks the first appellate-level decision addressing AI and fair use, prompting copyright counsel to consider arguments around potential licensing markets
Injunctions for HandsFree Labs and Align Technology come as the Court of Appeal warns that busy teams must have the staffing and resources to meet UPC deadlines
Gift this article